The Department of Labor is in the process of signing agreements with numerous states (Illinois, Missouri are included, more will be as time goes along) to share compliance and enforcement information.
What does this mean? Your company gets fined because it misclassified an employee as an independent contractor by your state. Ok, you’ve paid the fine, you are done, right? Not so fast, the information will now be reported to the Department of Labor. This new step will mean additional fines. Of course, the IRS will also be notified and they will be interested in ensuring your taxes are properly computed and paid, with penalties.
The Federal government, under Labor Secretary Solis, has significantly increased enforcement activities. This isn’t going away in the near future.
It’s easy to avoid liability; just follow the law. It is the right thing to do and, frankly, done correctly it will save you a lot of money and stress over time.
If you don’t know if you are in compliance (and many companies don’t) seek out a consultant to do an independent HR audit of your pay, HR policy and related systems. These are relatively cheap and you will be pleased at the resulting improvements.
